T own-Wide Energy Performance Contracting to Finance Infrastructure Improvements 1

Enfield’s Infrastructure Problem 2 All building infrastructure and mechanical systems wear out and need upgrading or replacement over time. In Enfield, infrastructure renewal has become a major need and priority. Multiple studies of the Town‘s facilities & infrastructure all confirm the magnitude of the issue. The current cost to address this growing problem was estimated at more than $80M in a recent SBS Study.

Specific Infrastructure Issues 3 Much of Enfield’s building infrastructure is showing the effects of age, for example: The recent failure of air conditioning at Central Library is another symptom of this problem

Funding Alternatives 4 Conventional General Fund/Cash-On-Hand funding of just priority infrastructure renewal need items would mean a potential 3.88 mill rate increase or a dedicated 5.5 year commitment. Alternatively, Enfield can address at least a portion of this need through the proposed energy performance contract with no impact on our tax rate. Energy Performance Contracting allows the Town to fund infrastructure repairs through energy use savings:  Net effect to the budget: +/- $ 0.00  Net effect to PP&E: + $11,200,000.00

Benefits of Proposed Project 5 Performance Contracting allows for immediate infrastructure improvement without increasing taxes or fees. Enables the Town to sustain cash flow and operational flexibility. Provides scheduled facility improvements and allows for efficient continued operations (Central Library HVAC). Helps ensure funding remains available for other important projects or purchases. Savings delta is continuous.

Progress to Date 6 State Issues RFQ to pre-qualify Energy Services Companies (ESCOs) Enfield Issues RFP to ESCOs chosen by State Enfield selects Peregrine Energy Group as Town’s Energy Advisor Enfield and Peregrine conduct interviews of four ESCOs Enfield selects Honeywell to move the project forward Honeywell conducts detailed Investment Grade Energy Audit (IGEA) Town selects a package of upgrades that optimize value to Enfield Open Book pricing evaluated/negotiated to ensure transparency Legal/Contractual/Guarantee finalized  Funding Approved (Referendum)  Project Commencement  Project Completion

Energy Performance Contracting Peregrine – Town Owner’s Agent Perspective 7

Peregrine Energy Group: Enfield Owner’s Agent Peregrine provided independent technical support to Enfield as owner’s agent (“OA”) Activities to date on behalf of Enfield:  Evaluated energy infrastructure needs and opportunities  Assisted in the competitive selection of performance contracting partner (Honeywell)  Participated in project development and contract negotiations Peregrine also served as OA for West Hartford, Bethel, and Bloomfield, for CT DOC, and for 12 MA municipalities 8

Peregrine Role in Project Development Provided an independent check on Honeywell engineering  Confirmed viability of all proposed energy savings measures  Evaluated the reasonableness of calculations and assumptions  Reviewed energy baseline Ensured that proposed savings measurement & verification methodologies met industry standards Supported negotiation of final contract language 9

Overview of Performance Contracting Performance contracting is a financing strategy for energy infrastructure modernization and replacement An Energy Services Company or “ESCO” is engaged to design and build a bundle of projects Bundle typically includes longer payback energy & infrastructure upgrades (e.g. boilers) and shorter payback energy saving measures (e.g. lighting) 10

Overview of Performance Contracting Together, the owner and ESCO agree on a mix of projects where annual energy savings over 15 years will cover all project capital costs and any costs of financing ESCO provides all project design, secures subcontractors and materials, and manages construction as part of its fee ESCO guarantees that if annual energy savings are not met it will reimburse owner for the shortfall 11

How Energy Performance Contracting Works? 12

Enfield Savings from Improvements Proposed 13

Mitigating Potential Owner Risks in a Performance Contract 14 If there are unforeseen project costs…  ESCO change orders are not permitted without owner authorization If the ESCO does not complete the work…  A construction bond is required from the ESCO to cover the cost of completing construction If work is sub-par…  All work must be fully commissioned to the owner’s satisfaction prior to it being accepted and final payments made If guaranteed energy savings are not achieved…  ESCO must reimburse the owner for the value of annual shortfalls

Energy Performance Contracting Honeywell –Energy Services Company 15

Project Activities to date 16 We have surveyed over 851,099 square feet of your facilities Placed data loggers in all facilities Developed a comprehensive list of energy & infrastructure measures and numerous financial options Determined that many mechanical plants are past their useful life Worked with Eversource to maximize incentives spent over 3,300 of man hours developing and analyzing projects to focus on short and long term needs

Enfield’s Project - Facilities Old Town Hall *Assessment only 17 Town Buildings – 36.7 % of savings Emergency Medical Services Enfield Senior Center Pearl Street Library Central Library LaMagna Activity Center Enfield Town Hall Department of Public Works Enfield Police Department Adult Day Care Family Resource Center Village Center of Thompsonville* Buildings and Grounds Street Lighting School Buildings – 24.2 % of savings JFK Middle School Eli Whitney School Hazardville Memorial School Nathan Hale School Henry Barnard School Edgar Parkman School Prudence Crandall School Enfield Street School Thomas Alcorn School Harriet Beecher Stowe School Head Start Facilities Not Included WPCF Fermi High School Enfield High School Facilities surveyed

Project Solutions 18

Performance Contract Cost Breakout 19

Enfield Savings from Improvements 20

Project Financials 21 Total Implementation Cost $11,200,000 Finance Term 15 Years Construction Term months Annual Savings $760,742 Total Utility Incentive Estimate $1,691,498 Estimated Positive Cash Flow $1,000,000+

22 How Energy Performance Contracting Works?

Questions? 23